The price of a stock is $40.3. A call option on this stock has a strike price of $39.7 and is quoted at $1.6.

You enter a short position in this European call option.  One option contracts covers 100 underlying shares. 

The call option is exercised when the stock price is $42.1. Calculate your total net loss:

The price of a stock on July 1 is $84. A trader enters a long call option on this stock with a strike price of $87.9.

The quoted option price is $2.9. One option contract covers 100 shares.

If the call option is exercised when the stock price is $98.7, what is the trader’s net profit is:

Commonwealth Bank (CBA) shares are currently trading at $75. Three months from now, CBA will pay a dividend of $4.3 per share. If the riskless interest rate is 5% pa, what is the fair forward price ("F") for delivery of CBA shares in 9 months time?

Enter your answer to 2 decimal places. Do not enter the dollar sign "$".

The FTSE100 market index in London is currently sitting at 7200. The dividend yield on the FTSE100 is 3% pa and the riskfree rate is 5% pa.

Calculate the fair price ("F") for a futures contract on the FTSE100 with delivery in 17 months?

Enter you answer to 2 decimal places.

The spot exchange rate between Australia and New Zealand is AUD 1.00 = NZD 1.3. Interest rates in Australia and New Zealand are 4% and 7% per annum respectively.

Calculate the fair forward price for delivery of one NZD in 6 months time.

Your answer will be expressed in terms of AUD. Give an answer to 4 decimal places.

The spot price of West Texas Intermediate (WTI) oil is $43 per barrel.

The fair forward price for delivery of WTI Oil 3 months from now is $45. However, you notice that WTI Oil forward contracts with delivery in 3 months are quoted at $44 per barrel.

What trades are required now to capture this arbitrage opportunity?

A short forward contract can be "synthetically replicated" as follows:

Which of the following is inconsistent with the notion that there are no arbitrage opportunities?

You manage an equity portfolio currently worth $103m. The beta of this portfolio is 1.17. If the SPI200 futures contract is quoted at F=5448, how many short SPI200 contracts are required to fully hedge this equity portfolio?

Round your answer to the nearest whole number.

A trader enters a short futures contract on an asset when the futures price (F) is $2,300 per unit. Each contract covers 100 units of the underlying asset. The contract is closed out when the futures price (F) is $2,480. Which of the following is true?